Bill Text: NY A02661 | 2017-2018 | General Assembly | Amended
Bill Title: Provides for pharmacy benefit management and the procurement of prescription drugs to be dispensed to patients, or the administration or management of prescription drug benefits; sets forth definitions; provides for funds received by a pharmacy in trust for the health plan or provider and provides for accountability of such funds; further provides for an appeals process to investigate and resolve disputes regarding multi-source generic drug pricing.
Spectrum: Strong Partisan Bill (Democrat 26-2)
Status: (Introduced - Dead) 2018-05-24 - advanced to third reading cal.944 [A02661 Detail]
Download: New_York-2017-A02661-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 2661--A 2017-2018 Regular Sessions IN ASSEMBLY January 20, 2017 ___________ Introduced by M. of A. GOTTFRIED, ENGLEBRIGHT, GALEF, PAULIN, TITUS, HOOPER, JAFFEE, COLTON, WEPRIN, OTIS, MONTESANO, L. ROSENTHAL, ABINAN- TI, SEAWRIGHT, D'URSO, ARROYO -- Multi-Sponsored by -- M. of A. BENE- DETTO, COOK, CROUCH, DINOWITZ, GUNTHER, LIFTON, McDONALD, ORTIZ, PEOPLES-STOKES, PERRY, RAMOS -- read once and referred to the Commit- tee on Health -- recommitted to the Committee on Ways and Means in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the public health law, in relation to pharmacy benefit managers; and to repeal certain provisions of such law relating there- to The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 280-a of the public health law is REPEALED and a 2 new section 280-a is added to read as follows: 3 § 280-a. Pharmacy benefit managers. 1. Definitions. As used in this 4 section, the following terms shall have the following meanings: 5 (a) "Health plan or provider" means an entity for which a pharmacy 6 benefit manager provides pharmacy benefit management including, but not 7 limited to: (i) a health benefit plan or other entity that approves, 8 provides, arranges for, or pays for health care items or services, under 9 which prescription drugs for beneficiaries of the entity are purchased 10 or which provides or arranges reimbursement in whole or in part for the 11 purchase of prescription drugs; or (ii) a health care provider or 12 professional, including a state or local government entity, that 13 acquires prescription drugs to use or dispense in providing health care 14 to patients. 15 (b) "Pharmacy benefit management" means the service provided to a 16 health plan or provider, directly or through another entity, including 17 the procurement of prescription drugs to be dispensed to patients, or EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02266-02-8A. 2661--A 2 1 the administration or management of prescription drug benefits, includ- 2 ing but not limited to, any of the following: 3 (i) mail service pharmacy; 4 (ii) claims processing, retail network management, or payment of 5 claims to pharmacies for dispensing prescription drugs; 6 (iii) clinical or other formulary or preferred drug list development 7 or management; 8 (iv) negotiation or administration of rebates, discounts, payment 9 differentials, or other incentives, for the inclusion of particular 10 prescription drugs in a particular category or to promote the purchase 11 of particular prescription drugs; 12 (v) patient compliance, therapeutic intervention, or generic substi- 13 tution programs; and 14 (vi) disease management. 15 (c) "Pharmacy benefit manager" means any entity that performs pharmacy 16 benefit management for a health plan or provider. 17 (d) "Maximum allowable cost price" means a maximum reimbursement 18 amount set by the pharmacy benefit manager for therapeutically equiv- 19 alent multiple source generic drugs. 20 2. Application of section. This section applies to the providing of 21 pharmacy benefit management by a pharmacy benefit manager to a partic- 22 ular health plan or provider. 23 3. Duty, accountability and transparency. (a) The pharmacy benefit 24 manager shall have a fiduciary relationship with and obligation to the 25 health plan or provider, and shall perform pharmacy benefit management 26 with care, skill, prudence, diligence, and professionalism. 27 (b) All funds received by the pharmacy benefit manager in relation to 28 providing pharmacy benefit management shall be received by the pharmacy 29 benefit manager in trust for the health plan or provider and shall be 30 used or distributed only pursuant to the pharmacy benefit manager's 31 contract with the health plan or provider or applicable law; except for 32 any fee or payment expressly provided for in the contract between the 33 pharmacy benefit manager and the health plan or provider to compensate 34 the pharmacy benefit manager for its services. 35 (c) The pharmacy benefit manager shall periodically account to the 36 health plan or provider for all funds received by the pharmacy benefit 37 manager. The health plan or provider shall have access to all financial 38 and utilization information of the pharmacy benefit manager in relation 39 to pharmacy benefit management provided to the health plan or provider. 40 (d) The pharmacy benefit manager shall disclose in writing to the 41 health plan or provider the terms and conditions of any contract or 42 arrangement between the pharmacy benefit manager and any party relating 43 to pharmacy benefit management provided to the health plan or provider. 44 (e) The pharmacy benefit manager shall disclose in writing to the 45 health plan or provider any activity, policy, practice, contract or 46 arrangement of the pharmacy benefit manager that directly or indirectly 47 presents any conflict of interest with the pharmacy benefit manager's 48 relationship with or obligation to the health plan or provider. 49 (f) Any information required to be disclosed by a pharmacy benefit 50 manager to a health plan or provider under this section that is reason- 51 ably designated by the pharmacy benefit manager as proprietary or trade 52 secret information shall be kept confidential by the health plan or 53 provider, except as required or permitted by law, including disclosure 54 necessary to prosecute or defend any legitimate legal claim or cause of 55 action.A. 2661--A 3 1 4. Prescriptions. A pharmacy benefit manager may not substitute or 2 cause the substituting of one prescription drug for another in dispens- 3 ing a prescription, or alter or cause the altering of the terms of a 4 prescription, except with the approval of the prescriber or as explicit- 5 ly required or permitted by law. 6 5. A pharmacy benefit manager shall, with respect to contracts between 7 a pharmacy benefit manager and a pharmacy or, alternatively, a pharmacy 8 benefit manager and a pharmacy's contracting agent, such as a pharmacy 9 services administrative organization, include a reasonable process to 10 appeal, investigate and resolve disputes regarding multi-source generic 11 drug pricing. The appeals process shall include the following 12 provisions: 13 (a) the right to appeal by the pharmacy and/or the pharmacy's 14 contracting agent shall be limited to thirty days following the initial 15 claim submitted for payment; 16 (b) a telephone number through which a network pharmacy may contact 17 the pharmacy benefit manager for the purpose of filing an appeal and an 18 electronic mail address of the individual who is responsible for proc- 19 essing appeals; 20 (c) the pharmacy benefit manager shall send an electronic mail message 21 acknowledging receipt of the appeal. The pharmacy benefit manager shall 22 respond in an electronic message to the pharmacy and/or the pharmacy's 23 contracting agent filing the appeal within seven business days indicat- 24 ing its determination. If the appeal is determined to be valid, the 25 maximum allowable cost for the drug shall be adjusted for the appealing 26 pharmacy effective as of the date of the original claim for payment. The 27 pharmacy benefit manager shall require the appealing pharmacy to reverse 28 and rebill the claim in question in order to obtain the corrected 29 reimbursement; 30 (d) if an update to the maximum allowable cost is warranted, the phar- 31 macy benefit manager or covered entity shall adjust the maximum allow- 32 able cost of the drug effective for all similarly situated pharmacies in 33 its network in the state on the date the appeal was determined to be 34 valid; and 35 (e) if an appeal is denied, the pharmacy benefit manager shall identi- 36 fy the national drug code of a therapeutically equivalent drug, as 37 determined by the federal Food and Drug Administration, that is avail- 38 able for purchase by pharmacies in this state from wholesalers regis- 39 tered pursuant to subdivision four of section sixty-eight hundred eight 40 of the education law at a price which is equal to or less than the maxi- 41 mum allowable cost for that drug as determined by the pharmacy benefit 42 manager. 43 6. No pharmacy benefit manager shall, with respect to contracts 44 between such pharmacy benefit manager and a pharmacy or, alternatively, 45 such pharmacy benefit manger and a pharmacy's contracting agent, such as 46 a pharmacy services administrative organization: 47 (a) prohibit or penalize a pharmacist or pharmacy from disclosing to 48 an individual purchasing a prescription medication information regard- 49 ing: 50 (1) the cost of the prescription medication to the individual, or 51 (2) the availability of any therapeutically equivalent alternative 52 medications or alternative methods of purchasing the prescription medi- 53 cation, including but not limited to, paying a cash price; or 54 (b) charge or collect from an individual a copayment that exceeds the 55 total submitted charges by the pharmacy for which the pharmacy is paid. 56 If an individual pays a copayment, the pharmacy shall retain the adjudi-A. 2661--A 4 1 cated costs and the pharmacy benefit manager shall not redact or recoup 2 the adjudicated cost. 3 7. Any provision of a contract that violates the provisions of this 4 section shall be deemed to be void and unenforceable. 5 § 2. Severability. If any provision of this act, or any application 6 of any provision of this act, is held to be invalid, or ruled by any 7 federal agency to violate or be inconsistent with any applicable federal 8 law or regulation, that shall not affect the validity or effectiveness 9 of any other provision of this act, or of any other application of any 10 provision of this act. 11 § 3. This act shall take effect on the ninetieth day after it shall 12 become a law and shall apply to any contract for providing pharmacy 13 benefit management made or renewed on or after that date.
